Business Friendly Slovakia Presented by Robert Simoncic, CEO SARIO.

BusinessFriendlySlovakiaPresented by Robert Simoncic, CEO SARIO

Slovakia – Growing Heart of EuropeSlovakia – Growing Heart of Europe

Strategic

Geographic Location

Source: SARIO, 2011

I Establishment: 1st January 1993

I Official name: Slovak Republic

I Area (km2): 49,035

I Population: 5,379,000

I Capital: Bratislava

I Member of: OECD, WTO, NATO, EU, Schengen area

I Official currency: EURO

I Official Language: Slovak

I Government: Parliamentary democracy

I Election term: 4 years

I Neighbours: Austria, Czech Republic, Hungary, Poland, Ukraine

I Time zone: GMT + 1hour

Eurozone Member – Eurozone Member – OOne of the few from CEEne of the few from CEE

€ Eurosince 1st January 2009

EURO IMPLEMENTATION IMPACT: Limitation of Foreign Exchange Risk Lowering Transaction Costs Growth in Foreign Trade Increased Financial Stability

Source: SARIO, 2011

2010: Highest GDP Growth in the Eurozone 2010: Highest GDP Growth in the Eurozone

1,72

3,6

-0,2

-4,2

-0,2

1,61,1

0,5

3,2 3,1

1,72

1,3 1,1

2,9

4,1

Source: Eurostat, February 2011

COUNTRY RATINGS(Sovereign foreign currency ratings)

SLOVAKIACZECH

REPUBLICHUNGARY POLAND BULGARIA ROMANIA

A+ stable

A positive

BBB- negative

A- stable

BBB stable

BB+ stable

A1 stable

A1 stable

Baa3 negative

A2 Stable

Baa3 positive

Baa3 stable

A+ stable

A+ positive

BBB negative

A- Stable

BBB- negative

BB+ stable

A+stable

A stable

BBB+ stable

A- Stable

BBBstable

BBB-negative

A stable

A stable

BBB stable

A- stable

OECDCountry risk 0 0 2 0 4 4

Source: www.standardandpoors. com,www.moodys.com, www.fitchratings.com, www.jcr.co.jp, www.r-i.co.jp, www.oecd.org

Best Country Credit Ratings in the CEEBest Country Credit Ratings in the CEE

Source: World Bank Group – Doing Business Report 2011

Registering property

Paying taxes

Enforcing contracts

Protecting investors

Closing business

Construction permits

Methodology

The Doing Business projectprovides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level.

Starting a business

Trading across borders

Regional Leader according to World Bank Regional Leader according to World Bank

Getting credit

Low Labour Cost Low Labour Cost && High Labour Productivity High Labour Productivity

Labour productivity

744,50 €Slovakia

957,5 €23 488 CZK

Czech Republic

785,75 €3 102,96 HUF

Poland

739,23 €199 837 HUF

Hungary

Data for 2009Source: National Statistical offices of Czech republic, Hungary, Poland, Slovakia, Bulgaria, Romaniaexchange rate (as of 7 October 2010) EUR 1 = 24,530 CZK, 3,949 PLN, 270,33 HUF, 4,2720 RON, 1,9558 BGN

GDP (in PPS) per hour worked as compared to EU15 (100)Source: Eurostat 2010

Gross monthly salary

299,11 €585 BGN

Bulgaria

431,88 €1 845 RON

Romania

Corporate Income TaxPersonal Income Tax

Value Added Tax - VAT

Dividend tax Inheritance and Gift Tax

Real Estate Transfer Tax

RRepatriation of profitsepatriation of profits

Simple and Fair TaxesSimple and Fair Taxes

19% 19% Flat Tax RateFlat Tax Rate

Source: SARIO 2011

19%

0%

100%

20%

Top-Notch Sectors of Slovakia

Automotive3rd in world car

production in 2009 - 86 cars/1000 inhabitants

ElectronicsLeading Slovak Exporter –

driver of economic and technological growth

SSC/ICTSR is becoming a

hive of SSC and ICTs

Key Key SSector: Automotiveector: Automotive

Car Car PProduction in Slovakiaroduction in Slovakia

Source: SARIO 2010, Slovak Automotive Industry Association ZAP,VW, KIA, PSA-Peugeot

1st Place in 2008106 cars/1000 inhabitantsin World Car Production/1000 inhabitants

3rd Place in 200986 cars/1000 inhabitants

Key Sector: ElectronicsKey Sector: Electronics

Source: SARIO, 2010

IAssembly of Bravia models for the European market doubled in 2008 to 4mil.

I3D TV from April 2010

I Production of LCD 10 mil pcs.

I Assembly of LCD

I Logistic center

I Europe service center

I 3D TV from February 2010

IProduction of LCD moduls

IOnly 1 in Europe

IHeadquarter for Europe

I3000 new jobs

IInvestment 191,3 mil Eur

Key Sector: Key Sector: Information Communication TechnologiesInformation Communication Technologies

• 33 established Information-Communication Technological CentersShared Service Centers

• Employing over 20,000 people with college/ university education

excellent language skills

• In 2009 the ICT sector was more contributive for the state treasury than all companies from the entire Slovak industry

Source: IT Association of Slovakia, 2011

Key sectorKey sectorICTICT locations locations– – Highly Competitive SegmentHighly Competitive Segment

I Unique clustering of shared services and IT support creating a fast-paced, enthusiastic IT environment

I Advanced wireless technologies – Flash-OFDM, WiMAX, HSDPA – covering large majority of the population

I High population density and low deployment costs making development and experiments easier than ever

Founding mebembers of

IT Valley Košice:

Technical University of Košice

University of Pavol Jozef Šafárik Košice

T-Systems Slovakia

NESS Slovakia

Siemens PSE

VSE IT služby

Cisco Systems Slovakia

Microsoft Slovakia

Slovak Telecom

Kosice Self-governing Region

Founding mebembers of

IT Valley Košice:

Technical University of Košice

University of Pavol Jozef Šafárik Košice

T-Systems Slovakia

NESS Slovakia

Siemens PSE

VSE IT služby

Cisco Systems Slovakia

Microsoft Slovakia

Slovak Telecom

Kosice Self-governing Region

R&D R&D in Slovakia – Discover the Potentialin Slovakia – Discover the Potential

6,0

4,4

4,3

4,3

3,9

0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0

Finland (1)

Slovakia (52)

Romania (56)

Poland (58)

Bulgaria (88)

6,4

4,4

4,1

3,4

3,2

0 1 2 3 4 5 6 7

J apan (1)

Slovakia (37)

Poland (45)

Romania (74)

Bulgaria (92)

Availability of Scientist and engineers

Production process sophistication

Source: Global Competitiveness Report 2009-2010, World Economic Forum 2010Slide 1: To what extent are scientists and engineers available in your country? (1 = not at all; 7 = widely available) Slide 2: How sophisticated are the production services? (1 = not at all—labor-intensive methods or previous generations of process technology prevail; 7 = highly—the world’s best and most efficient process technology prevails)

Success Stories & FDI Success Stories & FDI IInflow to Slovakia nflow to Slovakia

Country of Origin

Investor

USA (140)

US Steel, Emerson, DELL EMEA Centre of Excellence, Whirlpool, IBM International Services Centre, HP European IT Operation Centre, Johnson Controls R&D Centre, AT&T, Accenture Technology Solutions, Getrag Ford (Deutschland)

China LENOVO

Taiwan AU Optronics, ESON, Foxconn, Delta Electronics

Germany Siemens, Volkswagen, T-Systems

Japan Sony, Panasonic, Yazaki, Mitsui Sumitomo

Korea Samsung, KIA Motors, Hyundai Mobis

France PSA Peugeot Citroen, Alcatel R&D

Source: National Bank of Slovakia 2010, SARIO, 2010

Slovakia success storiesSlovakia success stories

Source: SARIO, 2010

SARIO Who We AreSARIO Who We Are

Government Funded

Organization under the direction

of the Slovak Ministry of Economy

MISSION EXECUTED THROUGH 3 CORE SECTIONS

Foreign Direct Investment

Foreign Trade

Structural Funds of the EU

Thank you for your attentionThank you for your attention!!

For more information, you can contact us at:

Address: Slovak Investment and Trade Development Agency

Martincekova 17 821 01 BratislavaSlovak republic

Tel.: +421 2 58260 248Email: [email protected]

„Best European investment agency for high-tech investment“ (Awarded during the Global Investment Conference in La Baule in 2007)

INVESTMENT AID

BASIC FEATURES OF THE INVESTMENT AIDBASIC FEATURES OF THE INVESTMENT AID

I Objective: To Encourage Direct Investments -in less developed regions -with high added value

I Eligible Investments: INDUSTRY R&D SSC

I Administrative Body: Ministry Of Economy

I Legal Framework: Act On Investment Aid

INVESTMENT AID GRANTED IN 2002-2010

I 108 supported investment projects

I 6.1 billion € of eligible investments

I 40.611 of newly created jobs

I 1.2 billion € of aid granted

I 20% - average aid per investment

I 29.000 € – average aid per 1 newly created job

INVESTMENT AID GRANTED TO US INVESTORS

I 12 supported investment projects

I 675 million € of eligible investments

I 4806 of newly created jobs

I 88 million € of aid granted

I 14% - average aid per investment

I 18.400 € – average aid per 1 newly created job

NEW RULES OF AID FROM JUNE 2011

I Higher transparency & predictability - possible volumes and forms of aid exactly set for each district

I More favourable conditions for all types of project to be supported- lower requirements on minimal investment, longer period of project

I More flexibility for supported projects - possibility of reasonable changes during implementation

I Faster approval procedure -setting shorter periods for authorities involved in procedure

I Long-term support- no limitation for support of expansion after first project finished

I Higher efficiency for budget & motivation for companies - availability of 10 year tax relief

NEW RULES OF AID FROM JUNE 2011

I INDUSTRY - basic condition

- project of the new factory or expansion - min. amount of investment 14 mil. €, 7 mil.€ or 3.5 mil.€

(depending on unemployment rate in the region)

TV

VT

KSRA

RS

PT

LC

VK

SO

KK SB

PO

GL

LE

BJSK

SPML

HE SVPP

SN

BR

LM

TS

NOCA

DK

RKMT

ZA

KMBY

PBPU

IL

TNTR

BB

ZV DTZC

BS

KA

LV

NRZM

TO PE

BNNM

PN

TT

GA

DS

MA

SE

SA

PK

SCBA

HC

SL

KE

SA M

Y

KN

NZ

PD

ZH RV

MI

14 mil €

7 mil €

3.5 mil €

NEW RULES OF AID FROM JUNE 2011

R&D center - basic condition

- project of the new center or expansion - min. amount of investment 500 ths

I SSC - basic condition

- project of the new center or expansion - min. amount of investment 400 ths

NEW RULES OF AID FROM JUNE 2011

Forms of Investment aid

Income tax relief - 10 years

Cash grant (up to 50% in some districts)

Contributions on new jobs (up to 14 600 eur per employee )